USD/JPY analysis: poor Japanese data keeps the risk skewed to the upside

USD/JPY Current price: 112.08

US Treasury yields hovered around their 3-month highs, showed little signs of life.
Equities hovered around their opening levels, despite some solid earnings reports.

The USD/JPY pair settled at around 112.00 for a third consecutive day, once again confined to a tight intraday range. The pair surged to a fresh yearly high of 112.16 at the beginning of the day, as the market mood was up on the back of encouraging Chinese data, although thin volumes, caution ahead of Thursday's data, and a shortened holidays' week, all conspired to keep majors ranging. Data coming from Japan missed the market's expectations, weighing on the safe-haven currency even when sentiment turned dismal later in the day. Japanese Industrial Production increased by just 0.7% MoM in February, half the market's estimate, and decreased by 1.1% from a year earlier. The country will release early Thursday the April preliminary Nikkei Manufacturing PMI, previously at 49.2.

Meanwhile, US Treasury yields held near their recent highs, unchanged daily basis, while equities were unable to move away from their opening levels, losing their early momentum despite encouraging earnings reports released earlier in the day. Technically, the pair maintains a neutral-to-bullish stance short term, as, in the 4 hours chart, the pair held around its 20 SMA, although the lack of follow-through has turned the moving average flat, anyway still well above the larger ones. In the mentioned timeframe, the Momentum indicator remains directionless around its 100 level while the RSI hovers around 60. The risk will remain skewed to the upside as long as the price holds above the 111.80 level, the immediate support.

Support levels: 111.80 111.40 111.10

Resistance levels: 112.15 112.50 112.85

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